Watching Government: Sizing up the shutdown

Jan. 21, 2019
The partial US government shutdown closed some departments and agencies that regulate oil and gas, notably the Department of the Interior and the Environmental Protection Agency. Weeks into the standoff, however, trade association leaders were not certain how soon their members would start feeling the impacts.

The partial US government shutdown closed some departments and agencies that regulate oil and gas, notably the Department of the Interior and the Environmental Protection Agency. Weeks into the standoff, however, trade association leaders were not certain how soon their members would start feeling the impacts.

Some suggested that permit application delays could create the first significant problems. Others told OGJ that inevitably deferred decisions could be troublesome if the shutdown goes on for a long time.

“So far, I haven’t heard of any impacts from our members,” American Fuel & Petrochemicals Manufacturers Pres. Chet Thompson said on Jan. 11. “As a former EPA employee, I’m sympathetic. The biggest impact could be on permitting for projects, but it will be some time before we determine what it could be.”

The US Coast Guard could be affected in terms of port operations, Thompson said. “It will be some time before we determine how great the impacts will be.”

Western Energy Alliance Pres. Kathleen Sgamma also cited possible problems if permit applications are delayed. “But operators anticipate delays and request permits many months in advance,” she told OGJ on Jan. 14. “Our members are used to delays. So far, no rig has been stacked due to the shutdown.”

First-quarter onshore federal lease sales could be affected, but they likely could be combined with sales scheduled for the second quarter if the shutdown continues for long, Sgamma said. “We’re concerned that situations may arise which require [the US Bureau of Land Management] to be notified, and nobody will be there to answer the phone,” she said.

“It almost seems as if for every day the government is shut down, it adds 2 days to whatever you’re waiting for,” National Ocean Industries Association Pres. Randall B. Luthi suggested on Jan. 3.

For NOIA members, this includes an offshore well control rule, which the White House Office of Information and Regulatory Affairs is reviewing. Luthi noted that since the Office of Personnel Management has funding, the rule’s review probably can continue.

Appropriations have lapsed

Interstate Natural Gas Association Pres. Donald F. Santa said on Jan. 15 it’s fortunate that the US Federal Energy Regulatory Commission, INGAA’s principal regulator, is still operating. Two other entities, the Transportation Security Administration and the Pipeline & Hazardous Materials Safety Administration are, respectively, parts of the US Department of Homeland Security and US Department of Transportation, where annual appropriations have lapsed.

“We believe that agencies at the Interior Department, which is shut down, will need time to resume processing permits,” Santa said. That could affect INGAA members since interstate gas pipelines inevitably cross federal land in many cases, he observed.